North Korea is demanding a pay raise for at least some of its workers in the special Kaesong industrial complex, where South Korean firms manufacture products using labor provided by Pyongyang.
Sin Han-yong, president of Sinhan, a manufacturer of vinyl products, said that when North Korea was asked recently to provide more workers, it demanded a $30 per month pay increase from the current $67 a month rate.
Yoo Chang-geun, vice-chairman of The Corporate Association of Kaesong Industrial Complex (CAKIC), an association of South Korean tenant businesses, told VOA that the companies are still struggling to recover from the shutdown of the complex last year.
“Of course, it will be a burden. We have suffered significant financial losses from the shutdown of the complex last year. Many of the companies are still struggling to recover from the losses and the pay raise will definitely make their recovery efforts more difficult,” Yoo explained.
Yoo said the North Korean demand is a breach of an inter-Korean agreement, which calls for the two sides to negotiate worker wages every year in August.
Pyongyang has not publicly commented on the request for pay increases.
The facility, which hosts more than 120 South Korean companies inside North Korea, was shut down in April after the North pulled its 53,000 workers during a time of unusually tense relations following Pyongyang's third nuclear test. It was reopened in September.
This report was produced in collaboration with the VOA Korean service.